Top 5 tastytrade Segments of 2015...So Far!

At tastytrade, our goal is to improve our consumers’ financial literacy so they can be more proactive about their finances. We also value the feedback we get from our viewers, who let us know what topics they want to learn more about!

That’s why we came up with a list of the most popular segments from 2015. While there is much more exciting stuff to come, take a look back at what we've done so far this year!

1. Truth or Skepticism with Dylan Ratigan “Opening Day with Dylan Ratigan”

In the first episode of this series, Tom Sosnoff welcomes Dylan Ratigan to the studio. Ratigan takes a look at tastytrade’s mission, which is the empowerment of the average retail consumer to outperform markets by reducing risk and increasing the probability of profit, via options trading, and wonders, is this really feasible?

Ratigan has a more traditional, passive approach to investing than we do here at tastytrade. Thus, these crucial differences in philosophies and backgrounds leads to a thought-provoking discussion between Sosnoff and Ratigan.

2. Best Practices “Taking Advantage of Volatility”

In this segment of “Taking Advantage of Volatility,” Tom Sosnoff and Tony Battista differentiate implied volatility (IV), implied volatility rank (IVR), and historical volatility. These three calculations provide Tom and Tony with information about the potential moves of underlyings. This episode breaks down each of these terms and shows the viewer how to take advantage of each!

Tom and Tony go more in depth discussing how to understand each concept. The hosts believe implied volatility is useless when used by itself. Implied volatility thus must be understood within the context of implied volatility rank. Using these two terms, traders can better understand the past move of the underlying in order to predict future moves.

3. tastyBITES “Starting Out Options Trading”

On “Starting Out Options Trading,” Tom Sosnoff and Tony Battista draw a trading blueprint for beginners. The two rehearse a first-time-trader strategies and what they should be looking for in underlyings.

If Tom and Tony could go back in time, they said they would trade options like this:

The traders would commit 20% of their allocated capital into about five different trades. These trades would aim for 0% positive theta decay per day and would always be in a liquid underlying. Moreover, the traders discuss other important strategies they would use in their first trade. This segment provides great insight for a tastytrader who has begun to grasp the basics!

4. Market Measures “Active Trading vs. Passive Trading”

Tom Sosnoff and Tony Battista revisit some strategies in the S&P 500 and evaluate their performances on this Market Measures segment. To this date, the S&P 500 has gradually appreciated since 2000. However, if an investor was long this index and held, an options trader would have generated greater earnings with three basic options trades in the picture to the right.

If Tom and Tony bought and held the S&P 500, three basic options trades, which would require little management, would have outperformed buying the index outright. As the results show, the three active trades outperformed longing and holding the S&P 500 outright. Tom and Tony prove this by comparing their Sharpe Ratios - a metric that can be used to help determine the rates of success between multiple investments. Not only did the three active trades outperform passive investment, but the three active trades also reduced risk and held less capital in their respective positions.

5. Market Measures “Exiting Iron Condors”

The research team proved that closing an undefined risk trade, when it is trading over twice the amount of credit received, is a viable exit strategy. In this Market Measure’s segment “Exiting Iron Condors,” Tom Sosnoff and Tony Battista decide whether or not this exit strategy can apply to an iron condor, a defined risk position.

The first condor to be tested is a 25 point-wide iron condor, when it has experienced a loss at twice the original credit received. The duo finds out that though this exit strategy was not profitable, it did efficiently curb losses.

The next time around the two consider a 50 point-wide iron condor with the same exit strategy. A wider iron condor more closely resembles a strangle. After the study concludes, wider iron condors yielded the most profit when managing at 50% profit or exiting at twice the original credit received. This study shows that this exit strategy should be used for undefined risk trades and those defined risk strategies, which attempt to mirror naked options!

Earning a certain average profit per month by selling premium is something of interest to many investors and traders. Until now, no one knew how much extrinsic premium needed to be sold to generate a targeted average monthly profit. We’re about to change that.

Since Dylan last graced Chicago with his presence, markets have become a bit more choppy. Today’s Truth or Skepticism largely focused on potential opportunities and how Tom is positioning his portfolio.

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer.

Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardize Options.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”). tastytrade is a trademark/servicemark owned by tastytrade.